Creative destruction on a small scale

The absence of many tech IPOs in recent years also means the financial fallout and public awareness of start-up disappointments will be more limited. Findory.com Inc. shows just how quiet and contained the disappointments can be.

Former Amazon.com [employee] Greg Linden launched the Web personalization start-up in January 2004. User traffic to the site, which recommended content to users based on the Web sites they visited, doubled each quarter for the first two years until it began to plateau in early 2006, increasing only about 5% quarterly. Mr. Linden couldn't persuade venture capitalists to fund the company so it could make a major marketing push to reach more consumers.

While he could have continued to finance the site himself with the help of ad revenue, he wasn't excited about the business opportunities such as licensing the Findory technology to other firms. "When you start a company around this Google-size vision, it's hard to be really passionate about switching to that," says Mr. Linden.

In January, he announced he would stop working on Findory and let the site run on autopilot for awhile before shutting it down. But repercussions are limited: Mr. Linden was the only Findory employee [by that point] ... "This is kind of creative destruction on a small scale," he says.